SpineGuard (FR0011464452 – ALSGD), an innovative company that
develops and markets disposable medical devices designed to make spine
surgery safer, reported today its full-year 2016 financial results as
approved by the Board of Directors on March 23, 2017.

€ thousands – IFRS Audited

Dec 31, 2016

Dec 31, 2015

Revenue

7 463

6 346

Gross margin

6 354

5 365

Gross margin (% of revenue)

85,1 %

84,5 %

Sales, distribution & marketing

6 643

6 514

Administrative costs

2 049

1 968

Research & Development

1 295

857

Operating profit / (loss)

-3 633

-3 974

Financial Result

-545

96

Net profit / (loss)

-4 178

-3 878

Pierre Jérôme, CEO and co-founder of SpineGuard, said: “2016 saw
SpineGuard’s sales momentum continue and showed the great potential of
our DSG™ technology platform. Our commercial organization keeps
delivering double-digit growth via our PediGuard family of smart
drilling probes, which we expanded with the successful launch of the
PediGuard Threaded. At the same time, our R&D investments for the
integration of the DSG technology into implantable devices such as
pedicle screws has begun to bear fruit with first surgeries in Europe
and FDA clearance early in 2017. The US is a key market for SpineGuard
where we keep growing significantly year after year. Our focus on
operating expenses also allowed the company to improve its operating
result. We will continue to pursue this path as one of our corporate
objectives for 2017.”

Operating income improves by 9%

In 2016, SpineGuard reported full-year revenue of €7,463k compared with
€6,346k for 2015, an 18% increase both on reported basis and cc. 8,603
PediGuard units were sold compared with 7,449 in 2015, including 4,948
in the United States.

The gross margin improved by nearly €1M and 60 bps at 85.1% compared
with the prior year of 84.5%, and remains strong. The improvement
year-on-year is the result of a combined stability of average selling
prices and more favorable country mix with an improved performance on
manufacturing cost despite headwinds on currency vs. prior year.

Operating costs increased by €648k (+7%); mainly due to R&D expenses
related to the clearance of both PediGuard Threaded and the DSG™ screw
(€438k).

With the combination of an improved gross margin and the control of
operating expenses, the operating result improved by +€340 k (or +9%)
vs. prior year.

The Company reported a net loss of €4,178k for the full-year 2016
compared with a loss of €3,878k for the full-year 2015, impacted by the
increase of financial costs related to lower Fx gains of €114k and an
increase of interest on loans by €439k.

Working capital was €955k compared with €-65k for the full-year 2015.
The increase is mainly due to the building of the inventory of the new
products prior to their commercial launch (PediGuard Threaded and DSG
modules for the screw), the anticipation of purchases with our
Singapore-based manufacturing partner and the Fx Euro/dollar unfavorable
impact on the manufacturing cost.

At December 31, 2016, cash and cash equivalents were €1,804k compared
with €3,229k at December 31, 2015. The Company has the possibility under
certain conditions to draw a €1.5M tranche of debt with IPF Partners.

2016: Excellent sales momentum and strategic objectives achieved

Sales; marketing and regulatory:

2016 was a year of significant breakthroughs in the United States:

Contracts with important hospital systems were either signed or
consolidated;

A partnership agreement with OrthoPediatrics for the exclusive
commercialization of PediGuard® in pediatric hospitals was signed;

A commercial agreement with Spartan, which is dedicated to veteran and
military institutions;

The expansion to 36 spine teaching institutions using DSG-enabled
devices in their curriculum;

A number of non-stocking distributors growing from 77 to 80;

The sales team was reinforced with the hiring of a Sr. Sales Manager
for the South region and by repositioning a product specialist in the
Northeast region;

FDA clearance of the PediGuard Threaded was received in June 2016,
with a product launch in October 2016 at the North American Spine
Society (NASS) congress.

In the rest of the world, the Company focused on procuring extensive
training and marketing support to the network of distributors making
significant progress in various markets:

PediGuard now used in 50% of the French spine teaching institutions
(CHU);

more than 800 PediGuard units sold in Saudi Arabia through a tender;

over 70 surgeons participated to the PediGuard Threaded workshop at
EuroSpine congress in Berlin in October 2016.

Clinical:

Eleven surgeons presented their experience with PediGuard in
international scientific conventions and five new clinical studies were
initiated:

2 prospective mono-centric studies for the use of PediGuard in
minimally invasive surgery in France and United Arab Emirates;

1 retrospective mono-centric study for the PediGuard use in so-called
bi-cortical techniques in the US;

1 prospective randomized and mono-centric study comparing PediGuard to
navigation in the US;

1 study on specimen about the use of the DSG™ screw with Zavation in
the US.

2017 perspectives:

After the FDA clearance in the US early 2017 for the DSG™ screw,
SpineGuard intends to:

Sign new deals to expand the commercial penetration of the
DSG™-enabled screws;

Enlarge the scope of the DSG™ platform to other applications such as
Bone Quality Measurement (BQM), combination with robotic, licensing
agreements for non-spine (trauma, maxillo facial);

Continue to grow sales and improve its operating result.

Next financial press release: First Quarter 2017 revenue, on
April 6, 2017.

About SpineGuard®

Co-founded in 2009 in France and the USA by Pierre Jérôme and Stéphane
Bette, SpineGuard’s mission is to make spine surgery safer by bringing
real-time digital technology into the operating room. Its primary
objective is to establish its proprietary DSG™ (Dynamic Surgical
Guidance) technology as the global standard of surgical care, starting
with safer screw placement in spine surgery and then in other surgeries.
PediGuard®, the first device designed using DSG, was co-invented by
Maurice Bourlion, Ph.D., Ciaran Bolger, M.D., Ph.D., and Alain
Vanquaethem, Biomedical Engineer. It is the world’s first and only
handheld device capable of alerting surgeons to potential pedicular or
vertebral breaches. Over 50,000 surgical procedures have been performed
worldwide with DSG enabled devices. Numerous studies published in
peer-reviewed medical and scientific journals have demonstrated the
multiple benefits that PediGuard delivers to patients, surgical staff
and hospitals. SpineGuard is expanding the scope of its DSG platform
through strategic partnerships with innovative medical device companies
and the development of smart instruments and implants. SpineGuard has
offices in San Francisco and Paris. For further information, visit www.spineguard.com.

The SpineGuard securities may not be offered or sold in the United
States as they have not been and will not be registered under the
Securities Act or any United States state securities laws, and
SpineGuard does not intend to make a public offer of its securities in
the United States. This is an announcement and not a prospectus, and the
information contained herein does and shall not constitute an offer to
sell or the solicitation of an offer to buy, nor shall there be any sale
of the securities referred to herein in the United States in which such
offer, solicitation or sale would be unlawful prior to registration or
exemption from registration.